INCOME TAXES

(Loss) income before income taxes, non-controlling interests and dividends on preferred shares were as follows:



(amounts in millions)	For the year ended December 31, 2015			For the year ended December 31, 2014			For the period from inception (April 23, 2013) through December 31, 2013			For the ten months ended October 31, 2013
	(Successor)			(Successor)			(Successor)			(Predecessor)
Domestic	$	(290.8	)	$	(103.9	)	$	(7.9	)	$	(74.2	)
Foreign	61.5			73.0			(193.5		)	100.7
Total	$	(229.3	)	$	(30.9	)	$	(201.4	)	$	26.5

Income tax expense (benefit) consisted of the following:



(amounts in millions)	For the year ended December 31, 2015			For the year ended December 31, 2014			For the period from inception (April 23, 2013) through December 31, 2013			For the ten months ended October 31, 2013
	(Successor)			(Successor)			(Successor)			(Predecessor)
Current:
U.S.:
Federal	$	0.7		$	(0.6	)	$	0.3		$	(5.3	)
State and local	(0.2		)	0.4			0.1			0.3
Foreign	120.1			36.7			1.3			22.8
Total current	120.6			36.5			1.7			17.8
Deferred:
U.S.:
Federal	6.4			(18.3		)	(2.1		)	(3.1		)
State and local	(5.2		)	0.4			(0.3		)	0.1
Foreign	(46.7		)	(25.3		)	(5.1		)	(1.8		)
Total deferred	(45.5		)	(43.2		)	(7.5		)	(4.8		)
Income tax expense (benefit)	$	75.1		$	(6.7	)	$	(5.8	)	$	13.0

Income tax expense (benefit) differed from the amounts computed by applying the U.S. Federal statutory tax rates to pretax income, as a result of the following:



(amounts in millions)	For the year ended December 31, 2015			For the year ended December 31, 2014			For the period from inception (April 23, 2013) through December 31, 2013			For the ten months ended October 31, 2013
	(Successor)			(Successor)			(Successor)			(Predecessor)
U.S. federal statutory tax rate	35.0		%	35.0		%	35.0		%	35.0		%
Taxes computed at U.S. statutory rate	$	(80.3	)	$	(10.8	)	$	(70.5	)	$	9.3
State income taxes, net of federal benefit	(3.6		)	0.8			0.4			(2.2		)
Preferred dividend valuation	—			—			60.2			—
Tax on foreign operations	5.8			(7.7		)	0.4			0.8
Net change in reserve	27.5			1.5			(0.7		)	(0.1		)
Change in valuation allowances	72.6			0.2			(0.9		)	3.6
Provision for tax on undistributed foreign earnings	5.0			(3.7		)	0.8			(0.7		)
Change of tax rate	(1.0		)	(0.5		)	—			(0.5		)
Non-deductible transaction costs	40.5			6.5			4.2			1.9
Foreign exchange impact on provision	—			—			—			0.1
Purchase price contingency	0.4			6.6			—			—
Other non-deductible items	9.1			—			—			—
Other, net	(0.9		)	0.4			0.3			0.8
Income tax expense (benefit)	$	75.1		$	(6.7	)	$	(5.8	)	$	13.0
Effective tax rate	(32.8		)%	21.7		%	2.9		%	49.0		%

The Company has provided deferred taxes of $7.1 million under ASC 740-30-25 for the potential repatriation to the United States of earnings from certain non-U.S. subsidiaries. The Company has not recognized a deferred tax liability for U.S. taxes on the undistributed earnings of most of its foreign subsidiaries because those earnings have been determined to be indefinitely reinvested. The undistributed earnings of those subsidiaries were $390 million and $264 million for the years ended December 31, 2015 and 2014, respectively. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested earnings is not practicable.

The components of deferred income taxes at December 31, 2015 and 2014 were as follows:



(amounts in millions)	December 31, 2015			December 31, 2014
Deferred tax assets:
Accounts receivable	$	8.9		$	5.9
Inventory	6.6			—
Accrued liabilities	34.8			3.6
Employee benefits	27.5			20.2
Research and development costs	11.8			11.2
Tax credits	49.3			39.3
Net operating losses	332.3			17.5
Goodwill	26.8			31.2
Financing activities	30.7			4.5
Other	41.4			11.9
Total deferred tax assets	570.1			145.3
Valuation allowance	(403.6		)	(19.7		)
Total gross deferred tax assets	166.5			125.6
Deferred tax liabilities:
Plant and equipment	38.6			16.7
Intangibles	767.3			280.1
Undistributed foreign earnings	7.1			2.6
Inventory	—			0.8
Other	2.9			2.5
Total gross deferred tax liabilities	815.9			302.7
Net deferred tax liability	$	649.4		$	177.1

Effective December 31, 2015, the Company elected to early adopt ASU 2015-17, "Income Taxes: Balance Sheet Classification of Deferred Taxes," which eliminates the previous requirement to separate deferred income tax assets and liabilities into current and non-current amounts. Prior periods were not retrospectively adjusted. The following schedule presents net current and net long-term deferred tax assets and liabilities as of December 31, 2015 and 2014:



(amounts in millions)	December 31, 2015		December 31, 2014
Net current deferred tax asset	$	—	$	18.7
Net non-current deferred tax asset	29.4		6.5
Net deferred tax asset	29.4		25.2
Net non-current deferred tax liability	678.8		202.3
Total net deferred tax liability	$	649.4	$	177.1

Net non-current deferred tax assets are included in "Other assets" on the Consolidated Balance Sheet as of December 31, 2015. Net current deferred tax assets are included in "Prepaid expenses and other current assets" and net non-current deferred tax assets are included in "Other assets" on the Consolidated Balance Sheet as of December 31, 2014.

Valuation allowances reflect the Company's assessment that it is more likely than not that certain state deferred tax assets and foreign net operating losses will not be realized. The assessment of the need for a valuation allowance requires management to make estimates and assumptions about future earnings, reversal of existing temporary differences and available tax planning strategies. If actual experience differs from these estimates and assumptions, the recorded deferred tax asset may not be fully realized, resulting in an increase to income tax expense in Platform's results of operations. The valuation allowance for deferred tax assets was $404 million and $19.7 million at December 31, 2015 and 2014, respectively.

At December 31, 2015, the Company had federal, state and foreign net operating loss carry forwards of approximately $161 million, $413 million and $729 million, respectively. The Company also has a capital loss carry-forward of $76.1 million. The U.S. federal net operating loss carry-forwards expire between the years 2021 and 2035. The U.S. federal net operating loss carry-forwards result in a deferred tax asset of $56.4 million. The majority of the state net operating loss carry-forwards expire between the years 2017 and 2034. The state net operating loss carry-forwards result in a deferred tax asset of $21.3 million. Due to the historic and projected domestic losses, the Company has recorded a full valuation allowance against its U.S. federal and state net deferred tax assets exclusive of the indefinite lived assets. The foreign tax net operating loss carry-forwards expire between the years 2020 through 2035, with some being unlimited in utilization. This results in a deferred tax asset of $224 million. A valuation allowance of $206 million has been provided against the deferred tax assets associated with certain foreign net operating loss carry-forwards because the recent results of the business units associated with the loss carry-forwards indicate that it is more likely than not that the benefits from the net operating loss carry-forwards will not be fully realized.

Section 382 of the Internal Revenue Code, or the Code, imposes an annual limitation on the amount of a corporation's U.S. federal taxable income that can be offset by net operating losses, or NOLs, if it experiences an "ownership change" (as defined in the Code). The Company experienced ownership changes in 2013 and 2015 with respect to the acquisition of various companies. Accordingly, the use of the Company's NOLs generated prior to these ownership changes is subject to an annual limitation. If certain changes in the Company's ownership occur prospectively, there could be an additional annual limitation on the amount of utilizable carryforwards.

In addition, at December 31, 2015, the Company had approximately $29.2 million, $14.3 million, $4.3 million and $1.5 million of foreign tax credits, research and development credits, alternative minimum tax credits and state tax credits (net of federal tax), respectively, available for carry-forward. These carry-forward periods range from ten years to an unlimited period of time. As discussed above, a full valuation allowance has been recorded on the Company's U.S. federal and state net deferred tax assets exclusive of indefinite-lived assets.

Tax Uncertainties

The following table summarizes the activity related to the Company’s unrecognized tax benefits:



(amounts in millions)	For the year ended December 31, 2015			For the year ended December 31, 2014			For the period from inception (April 23, 2013) through December 31, 2013			For the ten months ended October 31, 2013
	(Successor)			(Successor)			(Successor)			(Predecessor)
Unrecognized tax benefits at beginning of period	$	27.7		$	25.6		$	—		$	22.7
Additions based on current year tax positions	20.7			1.7			0.3			0.8
Additions based upon prior year tax positions (including acquired uncertain tax positions)	72.2			7.4			26.3			0.3
Reductions due to closed statutes	(2.9		)	(6.7		)	(1.0		)	(0.3		)
Reductions for settlements and payments	(5.5		)	(0.3		)	—			—
Total unrecognized tax benefits at end of period	$	112.2		$	27.7		$	25.6		$	23.5

The Company has $112 million of total unrecognized tax benefits as of December 31, 2015, of which $92 million, if recognized, would impact the Company’s effective tax rate. The Company made payments in 2015 to settle uncertain tax liabilities of $3.4 million. Due to expected statute of limitations expirations, the Company estimates that $10.0 million of the total unrecognized benefits will reverse within the next twelve months.

The Company recognizes interest and/or penalties related to income tax matters as part of income tax expense (benefit), which totaled $4.9 million, $1.0 million and $(0.10) million, and $(0.2) million for the years ended December 31, 2015,2014, and the Successor and Predecessor 2013 Period. The Company's accrual for interest and penalties totaled $17.5 million and $4.7 million as of December 31, 2015 and 2014, respectively.

As of December 31, 2015, the following tax years remained subject to examination by the major tax jurisdictions indicated below:



Major Jurisdictions	Open Years
Belgium	2009	through current
Brazil	2009	through current
China	2009	through current
France	2009	through current
Japan	2010	through current
Mexico	2010	through current
Netherlands	2011	through current
South Africa	2011	through current
Taiwan	2010	through current
United Kingdom	2009	through current

The Company is subject to taxation in the U.S. and various states and foreign jurisdictions. As of December 31, 2015, the Company's tax years for 2012, 2013 and 2014 are subject to examination by the U.S. federal tax authorities. With few exceptions, as of December 31, 2015, the Company is no longer subject to state and local or foreign examinations by tax authorities for years before 2009. The Company is currently undergoing tax examination in several foreign jurisdictions. The Company believes it has appropriately accrued for the expected outcome of uncertain tax matters and believes such liabilities represent a reasonable provision for taxes ultimately expected to be paid. However, our liability may need to be adjusted as new information becomes known and as tax examinations continue to progress.